[MUMBAI] Tata Capital’s initial public offering (IPO) was sold out on the final day of bidding on Wednesday (Oct 8), reflecting strong demand from institutional and wealthy investors. It is India’s largest listing this year, at 155 billion rupees (S$2.3 billion).
Total bids exceeded the number of shares that were on sale, according to exchange data on Wednesday.
The shadow financier, a unit of one of India’s largest and most-reputed conglomerates, the Tata Group, is selling shares at 310 to 326 rupees apiece, valuing the firm at up to 1.4 trillion rupees.
The solid investor response augurs well for the company’s trading debut on Oct 13 as well as for the broader Indian market, where IPOs are expected to raise a record of more than US$5 billion in October.
At the top of its price range, Tata Capital will rank as India’s fourth-largest shadow lender by market value, after Bajaj Finance, Bajaj Finserv and Jio Financial Services.
India is the world’s fourth-largest IPO market this year, with proceeds exceeding US$11 billion in the first nine months of the year, according to data compiled by Bloomberg. Last year’s record was almost US$21 billion.
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The boom in listings has been driven by firms seeking funds to expand operations in the world’s fastest-growing major economy, where the benchmark stock index climbed for a record nine straight years through 2024.
A strong pool of domestic capital and millions of retail investors have been fuelling demand for newly listed shares.
On Oct 3, Tata Capital raised 46.4 billion rupees from anchor investors, including funds managed by Morgan Stanley, Goldman Sachs Group, and Nomura Holdings. Life Insurance of India, the nation’s largest insurer, was also among the subscribers.
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Tata Capital combines the strength of its Tata Group parentage, a diversified loan portfolio, robust risk management practices, and a pan-India omnichannel network to position itself as one of the most reliable and scalable non-banking financial companies in India, said SBI Securities in a note to clients.
At the top end of the price band, the shares would trade at about 3.4 times book value, according to SBI Securities. This is cheaper than listed peers such as Bajaj Finance, Cholamandalam Investment and Finance, and HDB Financial Services, according to Bloomberg. BLOOMBERG
